Social Security Code, 2020 - FAQs

Applicability of Social Security Code

To whom does the Social Security Code apply?

The Social Security Code is applicable to all the establishments, employees, and employers as mentioned under Schedule I of the Code.

Which are the Acts that will be repealed when this Code comes to effect?

The Social Security Code will repeal:

  1. The Employee's Compensation Act, 1923;
  2. The Employees' State Insurance Act, 1948;
  3. The Employees' Provident Funds and Miscellaneous Provisions Act, 1952;
  4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
  5. The Maternity Benefit Act, 1961;
  6. The Payment of Gratuity Act, 1972; 
  7. The Cine-Workers Welfare Fund Act, 1981;
  8. The Building and Other Construction Workers' Welfare Cess Act, 1996;  and
  9. The Unorganised Workers' Social Security Act, 2008.

Which are the States and Union Territories that has published the Draft Rules so far?

As of now, the Draft Rules for Social Security Code are published by Bihar, Chhattisgarh, Haryana, Jharkhand, Jammu & Kashmir, Maharashtra, Madhya Pradesh, Odisha, Punjab, Uttarakhand, and Uttar Pradesh.

Definitions in Social Security Code

Is there any change in the definition of an Employer under this Code?

Yes, the Code defines the Employer as it existed under the other labour and employment laws for the time being in force and also has included the contractor and legal representative of the employer under the definition.

Are there any changes in the definition of workers and employees?

Yes, the Code defines the term employee to cover the maximum range of employees and workers and eliminated the term workers. And the Code includes the definition of gig workers, platform workers, home-based workers, self-employed workers, and other unorganized workers in the ambit of workers

What is a Fixed Term Employment?

Fixed Term Employment means the engagement of an employee on the basis of a written contract of employment for a fixed period; Provided that his hours of work, wages, allowances, and other benefits shall not be less than that of a permanent employee doing the same work or work of a similar nature; and he shall be eligible for all benefits, under any law for the time being in force, available to a permanent employee proportionately according to the period of service rendered by him even if his period of employment does not extend to the required qualifying period of employment.

Provisions of Social Security Code

What are implications of PF under the Code?

The PF provisions remain the same; however, based on the new definition of wages, the PF contribution may enhance; this will further lead to a revision in the salary structure.

What are the changes made in ESI provides under the Code?

When the Social Security Code comes into force, the ESI provisions shall be made applicable to all the establishments across India if such establishments have 10 or more employees. Further, the Central Government to notify applicability of ESIC Act on those classes of establishment, which engage in hazardous or life-threatening activities. In such classes of establishment, ESI will be applicable even if only one worker is employed. Under the Code, employees can opt for voluntary inclusion under the ESI Scheme

Are there any changes in the provisions of Gratuity?

Gratuity provisions remain the same.

However, with regard to employees on fixed-term employment, the gratuity is payable on the termination of the contract period on a pro-rata basis and not on the basis of continuous service of five years. The amount of gratuity payable to an employee shall not exceed the amount as may be notified by the Central Government (20 Lakhs threshold will be removed); the working journalists’ gratuity threshold period gets reduced from five to three years.

What are the benefits for gig/platform/unorganized workers under the Code?

The Central Government will provide the Gig and Platform workers with life and disability cover, accident insurance, health and maternity benefits, old age protection, creche facility, and any other benefits as it may determine further.

For the Unorganized workers, the Central Government will provide life and disability cover, health and maternity benefits, old age protection, education, and any other benefits as it may determine further. The State Government will provide provident funds, employment injury benefits, upskilling facilities to workers, children educational schemes, housing, old age homes, and funeral assistance.

Compliance Digitization - SSC

Is there any development in the statutory compliance process?

Yes, the Code enables digitization. The employers have to maintain all the statutory records and returns electronically. The registration, renewal, changes, filing of the returns, remittances, etc., can be filed online. Also, the Code gives away multiple registration processes by making it unified and with the integrated filing of returns. This minimizes the compliances.

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